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Blackberry Not Seeking A White Knight

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John Chen, 58, is taking over as the interim CEO of BlackBerry, the Canadian mobile-phone company that only four years ago was one of the fastest-growing technology companies in North America and is now fighting for survival. But what he can achieve there is anybody’s guess.

Chen is taking over a company that has gone through a series of highly visible missteps: A 2012 shake-up that saw the company co-founder and co-CEO, Mike Lazaridis and co-CEO Jim Balsillie, step down; the firing of a CEO who refocused the company but not rapidly enough; and a takeover bid that fell through at the last minute.

The Hong Kong–born Chen, who received his masters in electrical engineering from the California Institute of Technology in 1979, engineered the turnaround at Sybase, a mature high-technology database software firm that had slowed to a halt in the 1990s. Chen refocused the firm, repositioned the product line and, in 2010, helped engineer its sale to SAP for $5.8 billion.

At BlackBerry, Chen’s task is a lot more formidable, not simply because the company has fallen on hard times but because it is perceived to have little of value going forward. “They have a loyal corporate following, a customer base that finds it hard to give up the BlackBerry,” notes high-tech investor Robert Raucci, managing partner of Newlight Associates in New York.

BlackBerry may also be undervaluing its IP, says John Alan James, an expert on global corporate governance from Pace University Center for Global Governance, Reporting and Regulation. Only a handful of technology companies have fully recognized the value of their IP, and BlackBerry is not among them. In fact, the company ignored a number of patent challenges only to lose in court and have to pay significant damages.

At Sybase, Chen focused on rebuilding the company, almost indifferent to shareholder calls for rebuilding value. The strategy worked out magnificently over a decade. At BlackBerry, some of the conditions are similar. But mobile technology continues to evolve rapidly, with competitors such as Apple and Samsung way ahead.

“I’m not going to look for somebody to do a deal,” Chen recently said in an interview. “I’m going to focus on making the business better. There are lots of assets in the company, and there are some really good things happening, and we need to find a way to broaden it, monetize it and serve the market a little better and more aggressively.”